Dayforce Inc (DAY) AI Stock Analysis

• Market Cap: $10.46B
• Dividend Yield: N/A
• Average Volume (3M): 2.14M
• Price to Earnings (P/E): 222.0
• Beta (1Y): 1.32
• Revenue Growth: 13.46%
• EPS Growth: 2.06%
• Country: US
• Employees: 9,600
• Sector: Technology
• Sector Strength: 80
• Industry: Software - Application
• EPS (TTM): 0.61
• Shares Outstanding: 159,692,540
• 10 Day Avg. Volume: 3,496,192
• 30 Day Avg. Volume: 2,144,725
• PEG Ratio: -9.24
• Price to Book (P/B): 4.50
• Price to Sales (P/S): 6.51
• P/FCF Ratio: 66.84
• Enterprise Value/Market Cap: 0.91
• Enterprise Value/Revenue: 5.26
• Enterprise Value/Gross Profit: 10.86
• Enterprise Value/Ebitda: 59.70
• 1Y Price Target: $73.60
• Price Target Upside: 9.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 76 Outperform
• Price Target: $76.00 ▲(12.76% Upside)

Dayforce Inc's overall stock score is driven by strong financial performance and a highly positive earnings call, supported by a significant merger agreement. However, the high P/E ratio and technical indicators suggesting overbought conditions temper the score.

Positive Factors

Acquisition Potential

Thoma Bravo's interest in acquiring Dayforce is not surprising given the depressed trading multiple for Dayforce shares recently, reflecting potential upside.

Earnings Performance

Dayforce reported another quarter of solid upside to revenue and EPS.

International Expansion

Dayforce has a solid growth profile and a long-term international opportunity, making shares attractive given the multi-year opportunity for margin expansion around international markets.

Negative Factors

Growth Concerns

Dayforce shares have lagged and traded at a discount to peers amid a recent moderation in growth, which is lingering longer than some other SaaS HCM vendors.

Profitability Challenges

Dayforce is still less profitable than some peers, and in the absence of a stronger growth trajectory the potential for further cost optimization could be accelerated.

Dayforce Inc Business Overview & Revenue Model

Company Description

Dayforce Inc (DAY) is a leading provider of human capital management (HCM) software solutions. The company specializes in delivering comprehensive workforce management, payroll, talent management, and human resources services through its cloud-based platform. Dayforce serves a diverse range of industries, assisting organizations in managing their workforce more effectively and efficiently. The core products include time and attendance tracking, employee scheduling, benefits administration, and compliance management, all aimed at optimizing HR processes and enhancing employee engagement.

How the Company Makes Money

Dayforce generates revenue primarily through subscription-based services and software licensing fees. The company offers its HCM platform on a Software-as-a-Service (SaaS) model, allowing clients to pay monthly or annually for access to its suite of tools. Key revenue streams include recurring subscription fees from existing clients, as well as professional services such as implementation, training, and support. Additionally, Dayforce has established significant partnerships with various organizations, enhancing its market reach and enabling integration with other enterprise systems, which can also contribute to revenue growth. The focus on providing scalable solutions for businesses of all sizes helps to drive customer retention and new client acquisition, further bolstering its earnings.

Dayforce Inc Financial Statement Overview

Summary

Dayforce Inc demonstrates strong revenue growth and improving profitability metrics, with a stable Balance Sheet and effective cash flow management. While profitability is on an upward trajectory, there remains potential to enhance margins and shareholder returns further.

Income Statement

Dayforce Inc has shown a robust revenue growth trajectory, with Total Revenue increasing from $842.5M in 2020 to $1.81B in TTM 2025. The Gross Profit Margin has consistently improved, reaching 48.4% in TTM. The Net Profit Margin, however, remains modest at 1.4% in TTM, highlighting areas for profitability enhancement. EBIT and EBITDA margins have shown a positive trend, indicating improving operational efficiency.

Balance Sheet

The company maintains a solid financial position with a Debt-to-Equity Ratio of 0.48 in TTM, reflecting manageable leverage. Stockholders' Equity has grown steadily, supporting an Equity Ratio of 27.3%. Return on Equity is relatively low at 1.0%, suggesting room for improvement in generating shareholder returns.

Cash Flow

Dayforce's cash flow management appears strong, with a significant increase in Free Cash Flow from $38.1M in 2022 to $209.8M in TTM. The Operating Cash Flow to Net Income Ratio is robust at 12.4, indicating healthy cash generation. However, the Free Cash Flow to Net Income Ratio of 8.1 suggests potential for further optimization.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.81B	1.76B	1.51B	1.25B	1.02B	842.50M
Gross Profit	876.50M	812.10M	646.50M	473.20M	382.30M	341.30M
EBITDA	159.50M	288.00M	264.60M	54.70M	23.10M	56.90M
Net Income	25.90M	18.10M	54.80M	-73.40M	-75.40M	-4.00M
Balance Sheet
Total Assets	9.50B	9.12B	9.01B	7.92B	7.17B	6.70B
Cash, Cash Equivalents and Short-Term Investments	557.30M	579.70M	570.30M	431.90M	367.50M	188.20M
Total Debt	1.23B	1.23B	1.24B	1.25B	1.18B	711.90M
Total Liabilities	6.91B	6.57B	6.61B	5.81B	4.94B	4.60B
Stockholders Equity	2.59B	2.55B	2.40B	2.11B	2.23B	2.10B
Cash Flow
Free Cash Flow	209.80M	171.50M	105.10M	38.10M	-14.90M	-90.00M
Operating Cash Flow	321.60M	281.10M	219.50M	132.60M	48.80M	-30.20M
Investing Cash Flow	-301.30M	-471.90M	-202.80M	-342.50M	-711.10M	38.80M
Financing Cash Flow	-1.42B	59.60M	242.00M	870.10M	407.50M	565.30M

Dayforce Inc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 67.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DAY, the sentiment is Positive. The current price of 67.4 is above the 20-day moving average (MA) of 56.81, above the 50-day MA of 56.98, and above the 200-day MA of 63.50, indicating a bullish trend. The MACD of 1.35 indicates Negative momentum. The RSI at 70.75 is Negative, neither overbought nor oversold. The STOCH value of 90.38 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DAY.

Dayforce Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAYC	81 Outperform	$13.19B	30.84	25.76%	0.66%	10.21%	-10.56%
SRAD	77 Outperform	$9.73B	75.37	11.80%	―	20.14%	335.82%
DAY	76 Outperform	$10.46B	222.00	1.89%	―	13.46%	2.06%
PCTY	71 Outperform	$9.82B	45.13	20.04%	―	13.74%	10.99%
PEGA	70 Outperform	$8.95B	45.24	41.55%	0.14%	12.47%	65.19%
ESTC	65 Neutral	$8.19B	192.75	-12.98%	―	17.04%	-273.13%
Sector *	61 Neutral	$35.38B	6.84	-10.99%	1.97%	8.74%	-8.28%

Dayforce Inc Corporate Events

Dayforce Inc Announces $12.3 Billion Merger Agreement

On August 20, 2025, Dayforce, Inc. announced a definitive agreement to merge with affiliates of Thoma Bravo, a leading software investment firm, in a transaction valued at $12.3 billion. The merger, which includes a significant minority investment from the Abu Dhabi Investment Authority, aims to accelerate Dayforce’s growth and AI leadership in the HCM sector. Under the agreement, Dayforce stockholders will receive $70 per share in cash, a 32% premium over the unaffected share price. The transaction, expected to close in early 2026, will result in Dayforce becoming a privately held company, with its stock no longer listed on public exchanges. The merger is subject to customary closing conditions, including stockholder and regulatory approvals.

Dayforce in Advanced Talks for Thoma Bravo Acquisition

On August 20, 2025, Dayforce, Inc. announced that it is in advanced discussions with Thoma Bravo regarding a potential acquisition valued at US$70 per share. While the outcome of these discussions remains uncertain, the potential acquisition could significantly impact Dayforce’s market positioning and stakeholder interests.